Checking on your potential competitors

Very few businesses don’t have competition – and with the Internet now creating global competition, you’re not just competing with your neighbours. You have to know who your competitors are and what they’re offering. It’s critical for setting competitive prices and being able to counteract marketing campaigns designed to poach your customers.

As a business owner, you should be finding out who is in direct competition with you and analysing the way they operate. It’s also important to question each move they make and why they reached certain decisions.

Opportunities are everywhere in business – taking advantage of them is less common than missing out on them. By paying attention to your competitors, you minimise the risk of them getting away on you with new products or marketing.

What’s new?

Stay ahead of the game by doing your research on any new competitors that may be looking to challenge your market share. There could be new businesses arriving on the scene selling substitutes, or similar goods or services to your own. But how do you know they even exist? Keep an eye on:

Exhibitions and trade fairs – new players will sometimes try to drum up a customer base at local trade fairs.

The Internet – blogs, review sites, online newspapers and a simple Google search for your product or service can keep you up-to-date on any new competition.

Advertising and marketing campaigns – TV, radio, billboards, print, and the Internet can make you aware of a competitor.

Press reports – depending on your industry, local papers may let you know.

Local business directories and your Chamber of Commerce – these can be excellent sources of information about new businesses on the horizon.

As soon as new competitors enter the market you’ll want to know all about them.

While you study your competitors, do not forget to develop your business further and create new products or services or licence before your other competitors do.

Observing the methods your competitors use to do business is essential. Staying up to date with what your competitors are planning is an essential part of honing your competitive advantage. Ensure you have a look at:

Prices – it’s vital you know all about their pricing strategies so you can match or better their offerings.

Distribution – the methods they use for delivering their products or services to consumers.

Brand – the values and messages they’re trying to convey with their images and branding.

Products/services – what they provide, how these are different from what you offer, and how they market them to their clients.

Loyalty – the techniques they use to entice customers to return and purchase again.

Ownership – who owns the businesses you compete against and what kind of people are they?

Go a bit further than just finding out about your competitors and delve into their customers as well. Discover who they are, what products or services they buy from your rivals and what they believe are the strengths and weaknesses of your competition.

Thanks to social media, it’s now easier to see what consumers think about your goods or services, and those of your competitors. As a space for freedom of speech, the Internet tends to bring out two types of people – those who aren’t content with a business, and those who are over the moon.

Viewing your competitors’ reviews online can be a great source of inspiration for where you can improve areas of your operation. For example, if people are complaining about the usability of your main competitor’s website, focus on making your site a user-friendly experience.

When you read positive reviews of your competitors, you’ll get an idea of what they’re doing right. This will offer insight into what their customers want.

Evaluate the information you obtain on your competitors and their customers. Find a way to cater to the needs of your competitors’ customers so you can take a larger chunk of the market. Are there gaps in the market you can exploit? Are suppliers saturating certain product areas?

Generally, there’s a simple formula for success – understand what your competitors are doing well, if there are not IP issues arising, consider adapting some of their methods to your own business, and do them better.

The content of this material is for general information purposes only. It does not take into account your personal finance situation and goals, and should not be relied on. We recommend you seek independent legal, financial and/or tax advice. All opinions, statements and analysis expressed are based on information current at the time of writing from sources which Westpac believes to be authentic and reliable. Westpac issues no invitation to anyone to rely on this material and intends by this statement to exclude liability for any such opinion, statement and analysis.